The rebound effect on water extraction from subsidising irrigation infrastructure in Australia

S. A. Wheeler*, E. Carmody, R. Q. Grafton, R. T. Kingsford, A. Zuo

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    89 Citations (Scopus)


    Over the past decade, Australia has been buying water entitlements and subsidising irrigation infrastructure to reallocate water from consumptive to environmental purposes in the Murray-Darling Basin (MDB). There is considerable evidence that irrigation infrastructure subsidies are not cost-effective, as well as questions as to whether water extractions are increasing (rebounding) as a result. We used 2481 on-farm MDB irrigation surveys and identified a ‘rebound effect’ on water extractions, with irrigators who received an irrigation infrastructure subsidy significantly increasing (21-28%) their water extraction, relative to those who did not receive any grants. Although the precise hydrological impact of this rebound effect on catchment and Basin-wide extractions remains unknown, publicly available water data suggest that reductions in extractions from the MDB – supposedly commensurate with increases in environmental flows – may have been overestimated, particularly in the Northern MDB. This overestimation may in turn be linked to issues with water measurement and extractions at the catchment and Basin-scale, which occur due to: (1) water theft and poor enforcement; (2) inaccurate or absent water metering; (3) growth in unlicensed surface and groundwater extractions and on-farm storage capacity; (4) legal and practical uncertainties in compliance tools, processes and water accounting; and (5) complexity of floodplain, evaporation and groundwater interactions. To respond to these water governance challenges, MDB water and rural policy actions must: (1) improve measurement of diversions and develop transparent and robust water accounting, independently audited and accounting for uncertainty; (2) improve compliance, fines and regulation; (3) use multiple lines of evidence for water accounting and compliance; and (4) prioritise the cost and environmental effectiveness of water recovery.

    Original languageEnglish
    Article number104755
    JournalResources, Conservation and Recycling
    Publication statusPublished - Aug 2020


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